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Three ebook business models for STM publishers

imagesThe top two results for the Google search ‘medical ebooks’ (to pick an example from the STM pantheon) tell you all you need to know about the parlous state of the promotion of what we could refer to as ‘ebooks outside of ebook reader formats.’

Whilst the significant activity that goes into the contracting, development, production, distribution and sale of STM ebooks may not deliver the sort of revenues scholarly publishing houses would like them to as DTC products, pirates must consider their content to be a superlative means of driving Google AdSense traffic for their own benefit, and doubtless issue earnest and fervent prayers on a nightly basis against publishers ceasing to issue STM monographs, edited anthologies, and textbooks altogether.

These sites will exist for as long as publishers continue to issue their content in what we would recognize as a ‘book format’. Even if it were possible to take them down, two more will appear in the their stead to accompany the legion of other methods by which STM book content is redistributed with no benefit (and presumably not insignificant harm) to the publisher such as advertising-driven content redistribution sites, fileshare crawlers, P2P torrents and blogs.

Hard to swallow though they may be, the facts are that:

  • Piracy is here to stay
  • DRM is a dead letter
  • A backlist can only be sold to an institution once (if it hasn’t already been sacrificed as a Big Deal licensing sweetner)
  • Existing DTC ebook business models are generally speaking delivering flimsy, fragile, or underperforming revenue streams.

The first two points have been beaten to death, so I won’t rehearse the same arguments here.

The third is hardly controversial.

However, I think STM publishers are in denial about the fourth one, as an acknowledgment of the same would necessitate a radical overhaul in the way they conduct themselves. They may deem this – falsely, in my opinion – potentially injurious to other areas of their enterprise still using those traditional business models entering their twilight years that nevertheless currently deliver significant revenues, albeit with little or no growth. The next three business cycles may well prove that to be a short-sighted strategy.

Look at the first commercial result that the link above resolves to. No offence, eBooks.com, but if I were an STM book publisher I don’t think the unique brand values and benefits I’d believe my content to contain is adequately represented by what you do (‘Most Popular Subjects: Body Mind Spirit, Business, Computers,
Family & Relationships, Health & Fitness…’). Furthermore, STM ebooks account for no more than (being generous) 5% of eBooks.com’s total sales according to the pie chart on their site; they have few reasons to be particularly interested in what STM publishers do. This ratio could also be interpreted as signifying the marginal interest that target customers have in buying content in this format, although we should not infer that the content itself is no longer of interest to them. It is the format, and probably also the price, that they are rejecting.

In spite of the challenges delineated above, there are opportunities for STM publishers who are willing (or perhaps rather more accurately, able) to trial some new business models. I still believe that there are opportunities for STM publishers to derive healthy revenues DTC from their front, mid and back lists in formats we may describe as ‘content in an ebook format’ for want of a better name if they are willing to try something just a little different.

By all means carry on what you are presently doing as well, but why not take just a fraction of the resource you are currently allocating on the indirect generation of advertising revenues for the pirate sites that are redistributing your content to your target audience for free, and consider experimenting with one of these three examples:

1) A ‘Freemium’ model (no access restrictions; presupposes an XML-first workflow): make all book content (or perhaps that which is more than 6 months old if you wish, but novelty is not a safeguard against piracy) available for free from a site you host, and therefore control, in the format of your choice. Ensure that the content cannot be cut and pasted, or otherwise downloaded. Of course, the content could be screen-grabbed, but why would a user bother? It will be ugly as sin, and they could just as easily find a nice, clean, unlocked, DRM-free PDF on pirate sites; but they are coming to your community for more than just content. Say a given reader is enjoying the title in question, and would like a version they can continue to consult on their iPhone or other mobile device at their leisure? By all means: that will be available for registered users to purchase. Register; select; check out; pay. ‘Why not just buy it on Amazon?’ Again, because your community going to provide all sorts of other value-adding lures; it’s not like you are short of content, tools, and relationships to populate this space with if you see fit. In short, you need to ensure that your target commuity will have a better experience as an STM specialist within an STM specialist environment that they would within the belly of the Amazonian beast.

2) A subscription model (access restrictions apply; presupposes an XML-first workflow): All front, mid, back list ebook content available to browse in a secure environment for $X per month. Tiered subscription levels provide access to the content in a choice of formats, bundles, and/or selections.

3) An advertising-driven model (presupposes you have access to a pure-play ad sales force that isn’t wasting its time trying to hit the wrong customers, who are SEO/SEM fluent): Think ‘Spotify or Last.fm for STM book content’. Readers get to browse your entire STM front, mid and back ebook list for free in the locked, non-saveable format of your choosing. Every content access is preceded by a mandatory 10-15 second advert.

I tweeted yesterday about rising balloons in another context, and the image has stayed with me through the day. There is only one way for the ebook balloon to go, and its rise will be in direct proportion to the fall in STM publishers’ DTC ebook revenues.

If they let go of it now, the fall may not kill them.

How long are STM ebook publishers prepared to wait to see if they can defy gravity?

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